It’s really easy to know when you are living beyond your means. There are unmistakable signs!
Living beyond your means is an easy trap to fall into if you ignore the signs. There are lots of warning signs that show you are headed for trouble, but lots of people choose to ignore them until it’s too late.
Some people fall into this trap because they lack discipline and don’t know how to control their spending. However, this isn’t the only reason people start living beyond their means.
When you live above your means, you are inviting financial stress. Unfortunately, most people who live this way don’t think long term. They are only focused on the present.
People who live beyond their means are not concerned about their financial future or how their decisions would affect them in the long run.
If you’re living beyond your means, you are living dangerously and sooner or later you’ll have to face the consequences.
SO HOW DO YOU KNOW IF YOU ARE LIVING BEYOND YOUR MEANS?
There are lots of ways to know.
When you live above your means, there are some obvious signs that are hard to miss as long as you pay attention to your finances.
So what are some of these signs? I am happy you asked!
Here are some unmistakable signs you are living beyond your means.
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11 UNMISTAKABLE SIGNS YOU ARE LIVING BEYOND YOUR MEANS
1. YOU SPEND A GOOD CHUNK OF YOUR INCOME PAYING CREDIT CARD BILLS
If you spend a large portion of your income paying credit card bills, it means you’re living on borrowed money.
When you live on credit, it’s an unmistakable sign you’re living beyond your means.
Your credit cards shouldn’t be used to supplement your income or pay for your living or non-essential expenses.
If you’re currently living like this, you need to scale back and make some lifestyle changes.
As long as you keep using credit cards to fund your lifestyle, you are never going to achieve financial freedom or have financial peace.
So commit to making some changes so you can free up some of your income.
2. YOU CAN’T AFFORD TO SAVE REGULARLY
Do you save money regularly or is something you do occasionally?
People who live beyond their means find they can’t save regularly, if at all.
Whether it’s saving for retirement or funding an emergency account, if you’re not saving regularly, you’re setting yourself up for some hard time!
The problem with not saving regularly is you will never be able to solve your financial problems or improve your finances.
If you can’t afford to save, you are doing something wrong and that needs to change. You have to prioritize saving some money from every paycheck no matter how little it is.
Yes, you may need to give up some of your comforts to be able to do this, but this is the only way out, if you really want to stop living paycheck to paycheck.
Start by living below your means and cutting out some expenses, so you can find the money to save.
3. YOU CAN’T AFFORD TO GIVE BECAUSE YOU NEVER HAVE ENOUGH MONEY
I don’t know about you, but it hurts me when I can’t give to causes I believe in.
There have been times when I really wanted to help but I couldn’t because I didn’t have enough money.
Some years ago, I had to cancel my monthly donations to Unicef and World Vision because I could no longer afford to support them. It was one of the saddest days of my life.
When your finances are out of order, you feel like you can’t even spare $10 to help someone else. That’s pretty sad and enough reason for you to want to fix your finances.
Whether it’s giving to your church, a charity or a family in need, if you can’t afford to give to a worthy cause becaue you are living beyond your means, that should motivate you to get your finances in order.
Your budget should have a giving category if you manage your finances well.
So take a look at how you spend your income to see where and how you can make some adjustments.
4. YOU USE CREDIT CARDS TO BUY STUFF YOU WILL NEVER PURCHASE WITH CASH
Spending your hard-earned cash is more painful than using plastic.
The use of credit cards somehow desensitizes you and prevents you from feeling any pain when you spend money.
When you use credit cards, it’s much easier to buy stuff you wouldn’t normally purchase if you paid cash for them.
If you find yourself buying a lot of stuff you don’t need or can’t afford because you have access to credit cards, you really need to stop that habit.
What you fail to realize is, that money isn’t yours and it’s going to cost you a lot more to repay it.
If you can’t pay cash for something, the smartest thing to do is to let it go until you can afford it.
If you have to rely on credit to make a purchase, it’s a clear sign you can’t afford it (unless you plan to pay off the balance immediately).
5. YOU LIE TO YOUR SPOUSE OR CREDITORS ABOUT MAKING PAYMENTS
Remember the check is in the mail?
I may or I may not have done this in the past, but what I can tell you is, it’s embarrassing.
When you get to the point where you start lying to your spouse or creditors about making payments, you know the proverbial sh*t has hit the fan!
Some people go as far as hiding their purchases or bills from their spouse because they bought stuff they couldn’t afford or failed to pay the bills.
Lying to your spouse or creditors isn’t a good way to live. Not only is this unfair to your spouse, you’re also jeopardizing your marriage.
Lots of marriages have fallen apart because one spouse was fiscally irresponsible and unwilling to change.
Some spouses even go as far as hiding money from their partners or using separate bank accounts because they didn’t want to get into a financial mess.
Since you can’t play this game forever, it’s better to stop now and focus on fixing your finances.
Sometimes you know you’re living beyond your means but you can’t help it. If you’re in this situation, you should get some professional help with your finances before you cause irreparable damage to your family life.
6. YOU OWE MONEY TO RELATIVES
There are times when you find yourself in some financial trouble and your relatives may decide to bail you out. Depending on the repayment terms (if any), this may not be a bad thing.
However, if this is something you do every month or every other month, it’s a sign that there’s a deeper problem you need to address.
You don’t want to be that relative who keeps borrowing from family members every month or coming up with one hardluck story after the other.
If you owe money to your relatives and you haven’t paid them back, please don’t borrow any more money until you settle your debt.
It’s not very nice to take advantage of one’s relatives. Instead of borrowing from them, figure out a way to live below your means so you don’t have to keep doing it.
It’s very easy to ruin relationships because of money, so be very careful with this practice.
7. YOU TAKE CASH ADVANCE ON A CREDIT CARD
There was a time when I thought I could just help myself to a little cash from my credit card whenever I needed it. It was fun while it lasted until I had to pay back all the money I had borrowed.
Cash advances usually carry a higher interest rate than the rate for purchases, so it’s not something I recommend.
You always have to remember this when you are tempted to take a cash advance from your credit card.
Why would you want to pay more interest when it’s smarter to change your spending habits?
Taking cash advances is a sign you’re living beyond your means and spending money that you can’t afford to.
8. YOU BORROW AGAINST YOUR PAYCHECK (YOU USE PAYDAY LOANS)
Payday loans are a rip-off because they charge high interest rates.
It’s a quick fix that doesn’t really fix anything!
Payday loans are unsecured, short term loans so they come with very high interest rates.
The problem with using payday loans is that you are still going to be in a bad financial situation after you repay the loan from your paycheck.
As long as you keep borrowinging against your paycheck, you’re going to keep living paycheck to paycheck every single month because you won’t ever have enough money to cover your expenses.
So the solution is to reduce your expenses and live below your means.
Here is a very good article on the dangers of payday loans. If you currently use them, please make sure you read the article.
9. YOU BUY MORE STUFF THAN YOU NEED SO YOU CAN USE YOUR CREDIT CARD
If you often buy more stuff than you need so you can meet the minimum purchase requirements for credit card transactions, you’re certainly living beyond your means.
Lots of companies and shops have minimum purchase requirements for credit card transactions. When you are desperate, you end up adding more stuff to your original purchase because you have no other means of paying for your needs (or wants).
If you think about this for a second, you can see how this isn’t really a good idea.
Because all you’re doing is increasing the balance on your credit card and paying more interest for things you probably don’t want or wouldn’t have bought!
There’s a better way my friend, if you’re willing to change and start doing things differently.
Instead of incurring more debt, commit to a budget and paying off what you owe. You don’t have to keep living beyond your means because you can see how damaging it is financially.
So the next time you think of swiping that card, pause for a minute and consider if it’s a smart move to pay for things you don’t need, or whether you are better off not incurring more debt.
10. YOU MAKE PAYMENT ON CARS AND OTHER FANCY TOYS YOU CAN’T AFFORD
Thankfully, when it comes to cars, I have always seen them as a means of getting from point a to point b. Consequently, I have never really being tempted to go into debt to purchase a car.
But, I know lots of people think differently. For some people, cars are a status symbol, and they will do anything to get the car of their dreams whether they can afford it or not.
For some, it may not be cars but motorcycles, boats or whatever they are into at any given time.
Paying for stuff you can’t afford just to look or feel good isn’t a very wise choice when you consider all the financial stress you have to go through.
Spending a lot of money on things that depreciate isn’t the best use of your resources.
Instead of buying things you can’t afford, look for used, good quality and affordable alternatives that serve the same purpose.
You can’t really enjoy stuff that are not fully paid for because you know you’re one or two missed payments away from a repossession.
So why waste your time and money on things you can’t afford especially when you know it can be taken away from you at any time?
11. YOU WORRY ABOUT MONEY ALL THE TIME
One sign of people who live beyond their means is, they constantly worry about money.
They spend a lot of time fretting about paying their bills and how to afford all their monthly expenses.
Because they are always short of cash, they are always trying to figure out how to make ends meet and life often feels like one big juggling act.
If you constantly worry about your finances, whether that’s paying your bills, paying off debt or saving money, it’s a clear indication your financial life isn’t in a good place.
Instead of worrying about money all the time, focus on fixing your finances. What can you do to become financially stable? What changes do you need to make to take control of your finances?
These are some of the questions you should ask yourself so you can stop living beyond your means.
Final thoughts on 11 unmistakable signs you are living beyond your means
Many people choose to live beyond their means for one reason or the other.
There are lots of ways to know if you are living beyond your means, and it’s up to you to recognize them and do something about them.
I have listed eleven of the most common signs in this post. I hope they will serve as a starting point for you to take control of your spending so you can stop living beyond your means.
Which of these signs you are living beyond your means can you identify with?